Citywire Wealth Manager – November 25, 2020 – By Dave Campbell
Active management in the US has been under pressure from ETFs for a decade now, but will global shocks like Covid-19 revitalize stockpickers’ skills?
If the past decade has been a rough time to be an active manager in general, it has been roughest for US equity managers in particular. Few specialisms have been as ripe for disruption by cheap beta products as the world’s biggest, deepest and most efficient equity market, the S&P 500.
Over the past decade, less than 14% of active managers outperformed the index after fees, according to S&P’s own active versus passive scorecard, the twice-yearly Spiva report. While adherents of exchange-traded funds (ETFs) would attribute that to a specific failing of active funds, it is not replicated in less researched and traded markets, such as short-duration bonds, where almost 53% of managers beat the index over 10 years.